Buying a house seems like something that should be pretty straightforward. You should be able just to pay money and get a house right? Wrong. Buying a house involves a variety of steps. One of them that you have probably heard of is escrow.
The name escrow doesn’t give many people an idea of what it is. Today we are going to address this, help you to understand what the concept is.
A Simple Definition
The simplest definition for escrow is the idea that a third party places a hold onto the money that you are going to use for a transaction. In some cases, it could be something of value. Escrow isn’t only used for homes, it is used for a variety of different purchases.
During escrow, neither side can claim the item or money that is being held. You could view it as a guarantee of sorts. A way to ensure that you do not get scammed out of your money.
Why Is Escrow Used?
Escrow is used to ensure that the sale of a high-value item will go through without either party play fast and loose. For homes that is important because they are one of the highest value (if not the highest value) items that you will ever purchase. You don’t want someone to take a house that you are in the process of buying and just pull it out from under you do you?
At the same time, escrow protects the seller by ensuring that you won’t just take your money and make a run for it after you have made it this far.
Further, escrow is a stage in the purchasing of a house that gives you time to iron out a contract. You get to layout the specific process you want to go through and the escrow agent ensures that the seller actually owns the house.
How Much Does Escrow Cost?
Every escrow is different. Not just that but different states have different definitions and regulations in regards to escrow, further separating what you should expect. On average, an escrow will be between 1 and 2 percent of the value of the home (or sale).
One of the biggest questions people have about escrow is whether or not the escrow must total the full amount of the purchase. The answer is no. At first, you will have to deposit earnest money. This is money to prove that you are serious about buying the house. Typically it is also between 1 and 2 percent the value of the home.
After that, you will need to put in the down payment and closing cost. This must be done before the closing can fully happen and the title transferred. The exact amount this will equal to will depend on your situation.
Looking To Sell Your House Fast? Looking For An Easy Route?
Sometimes it is hard to go through escrow and all of the various steps that are involved in the sale of a house. You might need to sell your house fast in order to buy another house or move out of state. When this happens you still have an option. You can use a cash for homes company.
In the Washington DC area, the best cash for houses option is Congressional Home Buyers. Congressional Home Buyers has been working with customers for years to ensure that their homes are given a fair price. All of that experience helps to ensure that you get a fair deal and that it is as quick as possible.
Your initial estimate will be given to you within a matter of hours once you fill out the form on the Congressional Home Buyers website. After that, you can get a full offer by having an inspection of your home within 24 hours. This inspection is performed by a Congressional Home Buyers expert and is often higher than the original assessment.
Then after you accept the offer, closing can take up to 10 days.
Why not consider working with a cash for homes company? The process is much simpler as they are able to handle most of the complicated details. No matter who you are though, you can enter the real estate world better informed on what escrow is and the process of a home sale.